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Farmers keep diesel fuel tax exemption

Ontario's new environmental commissioner says she's not trying to target farmers by asking questions about the provincial tax exemption they get on diesel fuel.

Dianne Saxe says the recent climate change talks in Paris focused on ending fossil fuel subsidies globally, and she raised the farmers' exemption from Ontario's 14.5-cent-a-litre tax on diesel when asked for an example.

"Perhaps we could, for the same money, treat farmers more fairly, get cleaner air and do less climate damage," Saxe said in an interview. "It sounded as if I was against money for farmers, which couldn't be farther from the truth."

Saxe insisted she's not saying the diesel tax exemption is a bad thing, or trying to dictate what the policy should be, but said it's something that should be looked at.

"The whole world is looking at fossil fuel subsidies," she said. "I'm just asking: why do we have this? Could we do it better? And I think it's possible we could."

The tax exempt diesel is dyed red in Ontario and is referred to as "coloured" fuel, and can be used for unlicensed construction, forestry, mining and farm equipment.

About $190 million a year is not collected in diesel tax in Ontario, and Saxe said she's not convinced most of that fuel is being used by farmers.

"Most of it, as far as I can tell, goes to other industries," she said. "I'm still trying to get those numbers from the ministry of finance."

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